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The energy regulator has put forward plans for its toughest ever clampdown on energy network profits in a bid to save households £5bn over five years.

Ofgem has set out plans to cut the amount of revenue energy companies such as UK Power Networks, SSE Electricity Networks and Scottish Power’s SP Energy Networks can return to shareholders.

It is the second major blow to the energy industry ahead of the planned retail price cap, which follows growing cries that networks are making more money than Ofgem intended to allow, adding to the burden shouldered by energy-bill-payers.

The operators of Britain’s electricity and gas grids claim around £250 a year from an average annual energy bill of £1,100...